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Bill’s By The Number$

Posted by: Kim Vo | Posted on: October 31st, 2016 | 0 Comments

1. HERE WE ARE – The S&P 500 is up +5.9% YTD (total return) through the close of trading last Friday 10/28/16. With 2 months and 1 day remaining in 2016 trading, the index is short of its +9.7% average annual performance over the last 50 years (1966-2015). The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. LONGEST EVER – The yield on the 10-year Treasury note closed last week (Friday 10/28/16) at 1.85%, the 190th consecutive trading day that the yield has closed below 2%, the longest stretch below 2% in the history of the nation. 10-year notes have been traded since 1790, i.e., 226 years of trading (source: Treasury Department).

3. UNLIKELY – The Federal Reserve has a 2-day meeting this week (November 1-2). The Fed has raised short-term rates between September 1st and a Presidential Election Day just 1 time in the last 40 years. That single rate hike was a bump of ¼ of 1% initiated by Alan Greenspan on 9/21/04 (source: Federal Reserve).

4. LONG-TERM – Austria issued sovereign debt with a 70-year maturity on 10/25/16. The 2 billion Euros of debt will mature in November 2086 and has a 1.50% annual coupon for the next 70 years (source: Financial Times).

5. SEEMS LIKE A DECADE AGO – Hillary Clinton announced her run for the White House on 4/12/15, 2 months before Donald Trump announced his presidential campaign on 6/16/15 (source: BTN Research).

6. START SAVING NOW – A child born in 2016 that begins kindergarten in the fall of 2021 would attend college between the years of 2034 and 2038. If that child attended an average public in-state 4-year college and if the annual price increases for public colleges experienced over the last 30 years (+5.5% per year) continued into the future, the aggregate 4-year cost of the child’s college education (including tuition, fees, room & board) would total $227,984 or $56,996 per year (source: College Board).

7. DISCIPLINED – 78% of Millennials follow a budget in managing their monthly spending. “Millennials” are adults aged 19-35 in 2016, i.e., individuals born from 1981-1997 (source: Chase).

8. AFFORDABLE? – Health insurance coverage available through the Federal exchange will show a +25% average price increase in 2017. The math is based upon the 2nd lowest cost “silver plan” offered by participating health insurance companies, the specific plan upon which federal tax credits are calculated (source: HHS).

9. SEVEN MILLION MORE RENTERS – The 111.4 million households in the United States on 9/30/09 were split between 75.3 million owners and 36.1 million renters. The 118.6 million households in the United States on 9/30/16 were split between 75.3 million owners and 43.3 million renters (source: Census Bureau).

10. THREE IN A ROW – India’s economy is forecasted to grow by +7.6% in calendar year 2017, a result that would make India the fastest growing major economy in the world for the 3rd straight year (source: IMF).

11. TAXES PAID – Federal estate and gift taxes collected during fiscal year 2016 (i.e., the 12 months that ended 9/30/16) were just $21.4 billion, less than two-thirds of 1% of the $3.267 trillion of tax receipts collected during the period. Total individual income taxes collected (1040s) were $1.546 trillion, its largest total ever and more than 5 times the size of the $300 billion of corporate taxes collected (source: Treasury Department).

12. NO DEGREE IN HAND – Just 32% of American adults at least age 25 graduated from college with at least a bachelor’s degree, i.e., 68% of American adults did not graduate from college (source: Census Bureau).

13. AT MY BEST – The average American borrower reaches the apex of his/her decision-making abilities with regard to fees and interest costs at age 53, i.e., the experience and knowledge acquired during your 30s and 40s is maximized at age 53 but then declines thereafter as cognitive abilities diminish in older Americans (source: Sumit Agarwal, Federal Reserve Bank of Chicago).

14. IT’S A NEW WORLD – The legalization of recreational marijuana is on the 11/08/16 ballot in 5 states (Arizona, California, Maine, Massachusetts and Nevada). Recreational marijuana usage is currently legal in 4 states (Colorado, Washington, Oregon and Alaska) plus the District of Columbia. If the 5 November ballots all pass, then 23% of US citizens would live in a state where recreational marijuana usage is legal (source: Tax Foundation).

15. MOST WINS – In the last 20 years (1996-2015), the major league baseball team with the best regular season record has won the World Series just 4 times – the 1998 and 2009 Yankees, and the 2007 and 2013 Boston Red Sox. The Chicago Cubs had the best regular season record in 2016, winning 103 games (source: MLB).

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Copyright © 2016 Michael A. Higley. All rights reserved. Email mick.higley@mahbtn.com for information.

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